Risk management is imperative
• Effective strategies help businesses to build resilience
THE world as we know it faces unprecedented change. As such, the ability to anticipate and cope with change is critical to all types of organisations.
Managing risk in a university, for example, is as important as managing risk in a large corporation and in the National Treasury. Knowing how resilient these entities are determines whether they will survive or be able to bounce back should they be put at risk. This, says president of the Institute of Risk Management South Africa (Irmsa) and GM of enterprise-wide risk management at Nedbank, Sheralee Morland, is why the capacity to effectively evaluate and manage risk is crucial.
“The resilience of South African organisations is being tested by macro issues, including geopolitical, sociopolitical and economic factors, and extensive regulatory expectations; and micro issues such as outdated technology, data costs, lack of skills, strikes and bureaucracy.
“Being able to identify and assess these challenges, and being decisive about how to deal with them, is paramount for the success and/or survival of organisations,” she says.
Senior manager of risk management support at the National Treasury and a vicepresident of Irmsa, Bheki Gutshwa, elaborates: “Most organisations have objectives. The goals of the National Development Plan, for example, are to develop and deal with poverty, unemployment and inequality,” he says. “However, the world is interconnected, forever evolving and faces countless challenges and threats. Political, economical and societal changes can impede the realisation of goals. Risk management provides organisations with the capabilities necessary to proactively identify, evaluate and manage risks that could hinder plans. The effective evaluation of risk helps build resilience by providing the information organisations need to develop and implement strategies that will minimise the severity of the risks and offer better chances of survival.”
According to fellow vicepresident at Irmsa and group head of risk at Imperial Holdings Limited, Berenice Francis, the volatility of the current environment, both locally and globally, makes it essential to be able to correctly assess operating landscapes and understand what needs to be done to ensure businesses are adaptable while meeting their day-to-day objectives.
“It is our responsibility to ensure that we discuss the right risks on relevant platforms, and implement timely actions so we not only mitigate possible risks, but are also able to take up opportunities that uncertainty often provides,” she says.
Risk management has evolved into a highly specialised profession in SA. This was expedited by Irmsa’s recognition as the country’s only professional body for risk management by the South African Qualifications Authority in 2012, and the institute’s introduction of the SA’s first Certified Risk Management Practitioners (CRM Prac) and Certified Risk Management Professional (CRM Prof) accreditations during the past three years.
“Last year was a pivotal year for the institute,” says Irmsa CEO, Gillian le Cordeur. “Not only did we celebrate the first CRM Prof board exam and then the second graduation of the country’s CRM practitioners, but attendance numbers at our events rose significantly.”
Individual membership to Irmsa increased drastically (from 1,700 this time last year to 2,659 in February 2017) and it now has 160 corporate members versus 140 last year. The organisation communicates to a database of more than 14,000 people (up from 10,000).
“We’ve also seen an increase in demand for our in-house training,” says Le Cordeur. “People are hungry to learn more and grow their skills in risk management.”